Peter Mathews on Prime Time NAMA Special

[Digout]

So would I.

Alrite Tonys, you agree that SCAMA needs a 10% increase in property prices over 10 years to break even?

[Anorakphobia]

So, you’re saying because he thinks the risk sharing 2.7 billion is a sham, despite being in there in black & white, he decides to disregard it for the purposes of his calculations and nationally proclaimed results, but he also decides he won’t mention that he’s disregarding it and thereby inflating his result.

You say we are recovering loans not property, that of course is only partly true, a pool you swim in all the time, but for everyone else they know that when we can’t recover the full loan, we then proceed to recover the money through the property. Your banker knows this as well as everyone else but again decides to produce figures & results by ignoring this fact, and again not mentioning that this is what he is doing.

The fact that you find this kind of nonsense acceptable tells us everything about your own “plucked out of the air” figures and your general arguments on everything else.
At the very least, very, very shoddy work imo.

If property prices continue to fall, the banks will have nothing to pay back to the taxpayer, nothing, they will be wound up.
So yes the risk sharing is a total joke, a worthless IOU.

The equivalent of a gambler standing at a roulette wheel and asking for 10k and promising you he will give you 12k back if his bet on black comes up.
However if it turns up red, he hasn't got a rex to repay you.

Everyone knows this is a multi billion roulette wheel spin and if it doesn't come up black for Lenny, we are bankrupt and we will not receive a single cent form the banks.

[FakeViking]

Everyone knows this is a multi billion roulette wheel spin and if it doesn't come up black for Lenny, we are bankrupt and we will not receive a single cent form the banks.

Oh but he's such a slick salesman.

[Disabled student]

Had the chance to watch it as it was 10 mins gone. I listened to it via subtitles. I have to say that Peter Matthews was impressive. His analysis was clear cut and to the point.

10 per cent rise in ten years seems unlikely given the fact that we are now in Deflation. Govt figures were too optimistic.

Hal - you sounded more like die hard Fianna Fecker as they were too well known for Obsfucation and hiding behind the legal doors ???.

[powderfinger]

Irrefutably?, his 3 scenarios have mores holes in them than a string vest. His last and worst case fable, if he did it correctly, should come out at about a 16 billion loss, but instead he manages to come up with 26 billion. He confuses loan values with asset values in all 3 variations and never makes allowance for the 2.7 billion risk sharing in any one of them, despite not reaching the 54 billion value for the 2.7 billion to come into play.

Can you elucidate on the 3 scenarios that you are drawing your string-vest analysis from Hal?
I presume the figures below are one of the scenarios to which you refer.

Peter Matthews says
Experts agree that a Nama outcome with highest reasonable probability is 65% recoveries on performing loans and 35% recoveries on non-performing loans. That reasonably forecasts the losses on Nama loans recoveries as follows:


Purchase price of the €77bn of Nama loans: €54bn


Recoveries on performing loans (65% x €30.8bn): €20.02bn


Recoveries on non-performing loans (35% x €46.2bn): €16.17bn


Total Nama loan recoveries: €36.19bn


Total losses on Nama loan recoveries: €17.81bn


The above implies an additional write-down requirement of 23% on €77bn

Thanks.

[Eamonn76]

1.So, you’re saying because he thinks the risk sharing 2.7 billion is a sham, despite being in there in black & white,

2.You say we are recovering loans not property, that of course is only partly true, a pool you swim in all the time, but for everyone else they know that when we can’t recover the full loan, we then proceed to recover the money through the property. Your banker knows this as well as everyone else but again decides to produce figures & results by ignoring this fact, and again not mentioning that this is what he is doing.

3.The fact that you find this kind of nonsense acceptable tells us everything about your own “plucked out of the air” figures and your general arguments on everything else.
At the very least, very, very shoddy work imo.

1. The risk-sharing is bogus and was only 5% anyway. Check out irisheconomy.ie.

2. This will be the €23 Billion in personal guarantees from bankrupt developers who have had plenty of time to prepare - think €2.3 Billion instead. Maybe less.
Or is it the Irish property which Judge Kelly says has fallen not 43% as Lenihan assumes to break even but 70 to 80%? Inevitable massive losses.
Why would the banks sell us good foreign loans? Not like them to be generous. They will give us the Irish trash and any foreign trash.

3. No one has refuted Mathews' arguments, but the NAMA business plan has been torn apart on irishecoonony.ie and elsewhere and most recently derided by Dan Boyle (and he has very low standards). Comparing NAMA supporters and opponents generally I have taken the extract below from Constantin Gurdgiev's blog:

True Economics: Economics 19/10/2009: A proud member of National Mediocrity

"Compare supporters and critics of Nama:
Supporters:

•Stockbrokers and Irish Banks' economists - all with a major conflict of interest implied in their positions as their respective organizations will be the intended beneficiaries of Nama. In my books, this does not invalidate their points and analysis, but it does raise a question or two;

•EU Commissioner who actually negotiated with Minister Lenihan Nama solution;
•Ghosts of other - possibly independent - economists who have spoken to the Minister in private?..

(And not to forget supporter Hal).

Critics:

•4 Nobel Prize winners, several senior faculty members from the top 5 Finance Departments in the world, and one former SEC Board Member;
•46 academic and practicing economists and finance specialists;
•4 authors of comprehensive analysis of Nama proposals (myself, Brian Lucey, Ronan Lyons and Karl Whelan - in alphabetic order) that provided more detailed and more accurate costings of Nama and alternatives than the one supplied by Minister's own staff;
•1 former banker - Peter Mathews - who has extensive experience in managing bad loans within a special division for such loans set up by ICC bank in the 1980s;
•A range of independent economic commentators some with extensive finance experience in the past;
•A number of top class finance entrepreneurs, including Dermot Desmond;
•Hundreds of people from finance, international finance and economics who comment on this blog and the Irish Economy blog;
•One Governor of the Central Bank who proposed significant changes to Nama that were subsequently taken out of context by His Intellectual Excellence's Government colleagues and reshaped into an unrecognizable watered-down versions to suit original Nama".

I know whom I believe.

[Anorakphobia]

1. The risk-sharing is bogus and was only 5% anyway. Check out irisheconomy.ie.

2. This will be the €23 Billion in personal guarantees from bankrupt developers who have had plenty of time to prepare - think €2.3 Billion instead. Maybe less.
Or is it the Irish property which Judge Kelly says has fallen not 43% as Lenihan assumes to break even but 70 to 80%? Inevitable massive losses.
Why would the banks sell us good foreign loans? Not like them to be generous. They will give us the Irish trash and any foreign trash.

3. No one has refuted Mathews' arguments, but the NAMA business plan has been torn apart on irishecoonony.ie and elsewhere and most recently derided by Dan Boyle (and he has very low standards). Comparing NAMA supporters and opponents generally I have taken the extract below from Constantin Gurdgiev's blog:

True Economics: Economics 19/10/2009: A proud member of National Mediocrity

"Compare supporters and critics of Nama:
Supporters:

•Stockbrokers and Irish Banks' economists - all with a major conflict of interest implied in their positions as their respective organizations will be the intended beneficiaries of Nama. In my books, this does not invalidate their points and analysis, but it does raise a question or two;

•EU Commissioner who actually negotiated with Minister Lenihan Nama solution;
•Ghosts of other - possibly independent - economists who have spoken to the Minister in private?..

(And not to forget supporter Hal).

Critics:

•4 Nobel Prize winners, several senior faculty members from the top 5 Finance Departments in the world, and one former SEC Board Member;
•46 academic and practicing economists and finance specialists;
•4 authors of comprehensive analysis of Nama proposals (myself, Brian Lucey, Ronan Lyons and Karl Whelan - in alphabetic order) that provided more detailed and more accurate costings of Nama and alternatives than the one supplied by Minister's own staff;
•1 former banker - Peter Mathews - who has extensive experience in managing bad loans within a special division for such loans set up by ICC bank in the 1980s;
•A range of independent economic commentators some with extensive finance experience in the past;
•A number of top class finance entrepreneurs, including Dermot Desmond;
•Hundreds of people from finance, international finance and economics who comment on this blog and the Irish Economy blog;
•One Governor of the Central Bank who proposed significant changes to Nama that were subsequently taken out of context by His Intellectual Excellence's Government colleagues and reshaped into an unrecognizable watered-down versions to suit original Nama".

I know whom I believe.

4 Nobel Prize winners versus Donie Cassidy, Frank Fahey, Tom Parlon and Mick Bailey


hmmmm
Let me have a think about that

[jpc]

I was watching it and I found that boyo McGrath to have a Frank Fahey/Cock Roche level of arrogant ignorant sneering bluster.

Clearly a future leader of FF, so.

Prepped to the last with talking points.
Probably, no definitely after being to one of those slimeball media courses.
Explains all the observations you made.

[Mitsui]

Following a link at irisheconomy.ie leads to this rather depressing but in a weird way refreshing summary of our economic situation & prospects on Naked Capitalism:

Trouble looms in Ireland after debt cut two notches and deficits soar naked capitalism

Note the comments beneath it from one "Vinnie G":

"it sounds very much like Spain, another not-so-long-ago Third World nation that was artificially catapulted to First World status based on handouts from abroad, while the 19th century mentality of the country remained unchanged. Your Ireland does reflect a 19th century mentality, and that is nothing to be proud of in the 21st century.... Simply put, what is now happening in Ireland and Spain is the effect of market forces lowering these countries to their proper respective stations. You are now being downgraded to your rightful Second World status."

A bit close to the bone, but there's certainly a lot of truth in it. Pretty easy to identify with Vinnie's other comment, though:

"You know, I live in Chicago, a city full of Irish American citizens who came here at a time when starvation was rampant in Ireland largely due to mismanagement, stupidity, and corruption. To me, it does not sound like much has changed".

[jpc]

Thats the perils of pig trough politics Mitsui.